While home sales jumped 17 percent last year, builders started only about 5 percent more houses.

North Texas new home sales rose 14 percent in the fourth quarter from a year earlier.

But even with strong demand, Dallas-Fort Worth builders couldn't break the 30,000-home start barrier in 2016.

Builders started 29,337 new homes in the area last year — an increase of only about 5 percent from 2015 levels, according to a report by Residential Strategies Inc.

A lack of labor, rising costs for land and building materials, and slow government approvals held back home construction in North Texas.

"The market continues to be constrained by a lack of construction trades," Ted Wilson, principal with Residential Strategies, said in the report. "While there have been some reported improvements in certain subcontractor categories, the overall construction cycle time remains protracted.

"There's a lack of labor in concrete, framers, bracers and more," Wilson said. "We are hopeful that increased hiring and training will alleviate some of the labor challenges, and we have forecasted that start activity will climb to 32,000 units for 2017."

North Texas home construction remains about 40 percent below where it was before the recession.

"There was a pretty good backlog of sales generated in the fourth quarter," Wilson said. "We'll see how that plays out in the spring market.

"As long as the mortgage rates don't go up too much more, the builders will be in pretty good shape."

Higher mortgage rates this year may cause some buyers to pull back.

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Wilson said that "affordability and mortgage rates are big concerns for the builders in 2017."

Builders in the fourth quarter started 6,424 houses — about the same number as in the final quarter of 2015.

At the same time, builders closed 6,834 home sales, 843 more than in the final months of 2015.

Total new home sales in North Texas last year were ahead by 17 percent from 2015, according to Residential Strategies.

With home finance costs at the highest level in more than a year, Wilson said some buyers are rushing to enter the home market.

"The rapid upward movement in mortgage rates pulled prospective buyers off the sidelines," he said. "For a loan of $350,000 — equivalent to the median-priced new home — this interest rate surge represents an increase of $132 in the monthly mortgage payment."

Builders are trying to focus on more affordable housing, Wilson said, in part because of the higher mortgage costs.

"They have been shifting for the last year and a half," he said. "A lot of the new product coming on the market is more in the middle of the market."

Wilson said some North Texas builders "will have a huge start push going into the spring market."